Bitcoin is a virtual currency. It does not exist in a physical form like the currency and coin we used to exist before. It does not even exist in a physical form like Monopoly money. Electrons – not molecules.
But consider how much cash you personally handle. You get a payout that you took to the bank – or you are placed independently without even seeing that the paper is not printed. You can then use the debit card (or a checkbook if you are old school) to access these funds. At best, you can see 10% in cash in your pocket or pocket. So it turns out that 90% of the money spent is a virtual electron, a table or a database.
Wait – these US sources (or any country they come from) are safe at the bank and are guaranteed in the FDIC's full credit of up to $ 250,000, right? Well, not exactly. Your financial institution should only deposit 10% of its deposits. In some cases, less. Loans the other money for 30 years for others. You give them for the loan and charge a fee for the privilege of letting them borrow.
How is money created?
Your bank is making money when you lend it.
Tell you to put $ 1,000 in your bank. Then they lend $ 900. Suddenly $ 1,000, and some have $ 900. It magically moves around $ 1900, where it was just a big one.
He's telling you that his bank lends $ 900 to another bank. This bank, however, lends $ 810 to another bank, which lends $ 720 to its customers. Poof! $ 3,430 in an instant – almost $ 2,500 from scratch – as long as the bank follows government central bank rules.
Creating Bitcoin differs from banking funds to generate cash from electrons. Governance of a non-governmental central bank, but a consensus of users and nodes. Not a limited Mint in the building, but distributed open source software and computing. And that requires some sort of real work. About this soon.
The first BitCoins was in a block of 50 (the "Genesis Block") created by Satoshi Nakomoto in January 2009. At first it did not have any value. It was just a cryptographic toy based on an article published a month ago from Nakomoto. Nakotmoto is a seemingly fictitious name – no one seems to know who they are.
After the Genesis block was established, BitCoins was created by tracking all BitCoins transactions for a sort of public account. The nodes / computers performing the ledger calculations reward it. For each of the successful calculations, the node is rewarded with a certain amount of BitCoin ("BTC"), which are then newly generated in the BitCoin ecosystem. Here is the term "BitCoin Miner" as the process creates a new BTC. As BTC's offer grows, and as the number of transactions increases, the work required to upgrade the public library becomes more difficult and complicated. As a result, the number of new BTCs in the system is approx. 50 BTC (one block) every 10 minutes everywhere.
Although the computing power of BitCoin mining (and updating the public library) is currently exponentially increasing, the complexity of the math problem (which requires a certain amount of inventory) or "evidence" is required for BitCoin mining and settlement of transaction books. So the system still generates only one BTC block 50 every 10 minutes or block 2106 every 2 weeks.
So, in a sense, everyone keeps track of everything – so all nodes on the network track every single BitCoin story.
How much does it cost and where is it?
The maximum BitCoin is available, and this number is 21 million. According to the Khan Academy, the number is expected to begin around 2140.
This morning, 12.1 million BTCs were in circulation
BitCoin is the BitCoin Wallet's own storage – the computer. The file itself demonstrates the number of your BTC number and can move on a mobile device.
If the file has lost the encryption key, then BitCoin's offer. And you can not give it back.
How Much Does It Exist?
Value is changing how much people think of as "real money" exchanging. But since there is no central authority that tries to keep the value around a certain level, it can change more dynamically. The first BTC is basically worth nothing at the time, but these BTCs still exist. On December 11, 2013, from 11 am, the state value of BitCoinen was $ 906.00. When I finished this sentence, it was $ 900.00. At the beginning of 2013, around 20 USD was around. On November 27, 2013, it received more than $ 1,000 worth of BTC. So this kind is changing for the moment, but it is likely to settle down.
The total value of all BitCoin – around the end of the sentence – is approximately $ 11 billion.
How can I bring something to you?
First, you must have a BitCoin wallet. This article has links to one.
Then one way to buy something from another private party, for example these guys on Bloomberg TV. One way to buy a bit of a replacement is like Mt. Gox.
And finally, one way is to drive a lot of computer energy and electricity to the process and get BitCoin mining. This is far from falling under the scope of the article. But if there are a few thousand extra dollars around it, you can catch it.
How do I download it?
Hundreds of dealers receive BitCoin payments in all sizes, ranging from shipment to car dealerships. There's also a BitCoin ATM at Vancouver, British Columbia, for turning BTC into Vancouver BC.
Money has long history for thousands of years. The latest legend says that Manhattan was purchased for wampum – seashells and the like. In the early years of the United States, different banks printed their own currency. During my recent visit to Salt Spring Island, British Columbia, I received money that was just good on the beautiful island. Among them, the common theme was a trust agreement between users, according to which the given currency kept the value. Sometimes this value is directly related to something solid and physical, such as gold. In 1900, the United States made money directly to gold (the "Golden Standard") and terminated the bond in 1971.
Currency is now traded just like any other commodity, although the currency value of a particular country can be subsidized or terminated through the activities of the central bank. BitCoin is an alternative currency that is also traded, and its value – similarly to other commodities – is determined by commerce, but it does not maintain or eliminate any banking activity, but directly to the activity of users. The supply is limited and known and (unlike the physical currency), so the history of each BitCoin. Its perceived value, like any other currency, is based on its usefulness and trust.
As a form of currency, BitCoin is not entirely new in creation, but this is of course a new way of creating money.
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